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7 Jan, 2012

Four New Airports Ready in Afghanistan, Tourists Now Sought

The Asian Development Bank has announced the completion of four airports in Afghanistan that are expected to play a major role in the economic development of the landlocked country. The airports involved a funding of US$35.3 million of which US$ $29.1 million was in the form of an ADB loan.

The four airports, Chaghcharan, Faizabad, Maimana, and Qalai-Naw, are all located in North Afghanistan, bordering Tajikistan, Uzbekistan and Turkmenistan. They were all existing structures which have been rehabilitated with 6.6 kilometers of new runways, 4,800 sq m of taxiway, 21,600 m2 of apron 1,013 m2 of new passenger terminal buildings, 12.4 km of airport boundary fence and apron security fencing and gates and 2,420 m2 of staff housing, along with all the requisite infrastructure.

The project was plagued by several months of delays mainly caused by nonresponsive bidding and deterioration in security. The delay resulted in an increase of 87.2% in construction costs.

Said the ADB’s completion report, made public last week, “The prolonged state of conflict in Afghanistan has resulted in large-scale deterioration of the civil aviation infrastructure and a depletion of skilled personnel. In addition to the lack of maintenance, the deterioration was accelerated by the heavy damage inflicted by prolonged civil strife and military operations.

“Afghanistan relies significantly on the civil aviation sector for keeping most of its remote communities within reach of much needed humanitarian aid and basic public services. Rehabilitating and strengthening the civil aviation sector is crucial for extending the reach of the government in Kabul, thereby facilitating stabilization and integration of the country.

“Rehabilitation of the airports will also help create employment, generate income at the household level, improve safety, improve the spread of medical facilities, help reconcile different ethnic groups, and unify the country politically.”

According to the report, “The state of the basic infrastructure, roads, communication, and housing is very poor in the regions. Certain areas had not had any new development for many years – some since hostilities broke out in 1972.”

The airports will help to facilitate year-round air travel services to about 2 million beneficiaries. The nearest larger townships are at least 2-3 days drive by land. They will also help improve government service delivery to these remote, neglected, conflict-affected regions.

The report says that “air transport is now possible all year round. Before, no air operations were possible for almost 3 months during the winter. Travel by land during these months was also restricted. Operation and maintenance costs of the aircrafts have also reduced considerably.”

The completion report is projecting that the economic development will lead within three years to a 50% decrease in narcotics cultivation in the project area, complete disarmament of regional warlords and reintegration of war combatants, refugees, and internally displaced persons in the project area.

The report says that 72 staff from the four airports and Ministry of Transport and Civil Aviation were trained in India on flight safety, air traffic control, and post-construction operation management.

It says that retaining them will be a major challenge, “as they may be lured by better remuneration offered by the private sector. MOTCA will provide a transparent career development path for its staff so they can plan their careers with a long-term perspective. For those who receive overseas training, MOTCA will obtain a commitment that they will either stay on in MOTCA for a certain period after their training or will repay the cost of training if they resign before the end of the period.”

Another problem will be recovering the costs of the development as well as the operations, and here tourism will play a major role in generating the increased traffic.

“Passengers will benefit from improved arrival and departure reliability, savings in travel time (valued in terms of the economic value of time) and diminished risk of flight cancellation or diversion, and safety improvements calculated on the basis of risk reduction of a catastrophic accident. The confidence of travelers is significantly affected by uncontrolled airstrips, poor visibility, and a poor record of on-time arrivals and departures.

The report says that “calculations have assumed that airports will receive some foreign and national tourist traffic, though field trip observations clearly indicate that some areas have significantly more potential for attracting tourists than others. Consequently, a forecast based on conservative assumptions was developed to calculate the benefits. It is estimated that only 50% of tourism expenditure represents the real cost of consumption of locally produced goods and services and return on local investments.

“It is estimated that about $110 per tourist represents the real net benefit from tourists arriving by air. The long-term benefits to the community are conservative, because they would also include the benefits from additional jobs that would not be created if the airports had not been upgraded.”

Says the report, “Aviation forecasts have been estimated for 27 years. The residual value after 30 years is assumed to be zero. The benefits and costs of the project occur as an annual stream, occurring at different points in time as benefits start after expenditures have been completed – in this case 2011.

“The consolidated economic internal rate of return (EIRR) for the four airports is 12% compared with original 22.2% for seven airports and 10.1% during the major change in scope. The project remains economically viable.”

The report also expresses the fear that “the airports could be used to transport opium. The security checks carried out in regional airports will be strengthened, but the distribution of opium through rehabilitated airports cannot be completely contained unless opium cultivation is eradicated.”